Origin to review door-knocking as AGL fined $1.55m

ACCC chairman Rod Sims has described AGL’s door-to-door sales tactics as “unscrupulous” but thinks small businesses will still need to use doorknocking for competition to keep the big three honest.
Photo: Glenn Hunt

by
Angela Macdonald-Smith and | Nabila Ahmed

Origin Energy
will consider halting door-knocking as a way of winning retail customers after a storm of poor publicity over the practice, including a $1.55 million fine for rival
AGL Energy
revealed on Tuesday.

Origin chief executive
Grant King
declined to put a date on when the country’s largest power and gas retailer would cease door-to-door sales but acknowledged the practice had resulted in “some bad outcomes" for customers.

He predicted it would become less frequently used as new technology provided more effective ways of communicating with customers.

“I am quite sure that at a point Origin will also cease to use some of those channels," Mr King told The Australian Financial Review.

“We haven’t yet made that decision," he said.

In a Federal Court consent order, the fine was levied on AGL by the Australian Competition and Consumer Commission for misleading and deceptive conduct by door-to-door sales people operating on its behalf in late 2011. The marketing company used was fined $200,000.

AGL said in February it was ceasing door-knocking, citing a negative response from some consumers.

On Tuesday,
Stephen Mikkelsen
, head of AGL’s retailing business, called for the rest of the sector to follow suit to protect consumers and improve the industry’s reputation.

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“This case demonstrates how difficult it is to control what sales people do when they are at people’s premises," Mr Mikkelsen said.

“Even if a company puts significant training and compliance mechanisms in place, door-knocking remains a risky sales technique."

Yet ACCC chairman
Rod Sims
said smaller retailers without an existing customer base relied heavily on door-to-door sales to win accounts and the practice was important for fostering competition. "We’re not trying to close it down because we see the benefits for competition," Mr Sims told the Financial Review.

“It’s hugely important that those smaller players are there to keep the big three honest. We’re just saying do it properly; there’s no reason why this cannot be done in a proper way."

Misleading and deceptive salespeople

EnergyAustralia
was the first major retailer to cease the marketing practice, although only when the ACCC was close to instigating proceedings against it, Mr Sims said.

AGL has cited Origin’s door-knocking as a potential impact on customer acquisition this June half.